Can anybody explain why the stock market is so high?

[karlrschneider]

I don't get it. Inflation is increasing, oil prices at record highs, unemployment getting worse day by day, the national debt is out of control, etc. I admit I know little about Wall street, I have never bought a single share of stock in my life...all my "investments" are real estate - at least they're something I can see and walk on whenever I want. :eyes:

[Flammable Materials]

1. Incoming ...

... C - R - A - S - H

[whistle]

2. Social security is likely to be looted then collapse and that means

...12.4% of the wages corporations pay will go to their bottom lines.

[rwheeler31]

3. Don't worry about it. Wall Street loves suffering.

It never works.

[alcuno]

4. High? Let me know when it gets to the same level it was at 5 years ago.

DOW 11,000!

[karlrschneider]

6. Sorry, should have said "highest in 3 1/2 years" as was reported on the

news tonight. I know it has historically exceeded that, but the very recent jump has me bamfoozled...

[Warpy]

13. It's heading for that peak again, thanks to funny money flooding in

from the Fed. That's that "increased liquidity" Greenspan has been maundering about.

The reason they're doing this is to sell the looting of the only retirement a lot of boomers have. They're trying to convince the poor stupid kids who haven't really seen a sharp stock market decline, double digit inflation, and corporate thievery wiping out their entire net worth that the market is a sure thing.

That's what this is all about.

[susanna]

17. BINGO.

Semi-rant I guess...

I saw one of the articles about Santorum's (ack) Town Hall to pump up the SocSec private accounts. A younger person (early 20s) in the audience got angry at an older worker (over 55) who said he wanted the system to go on as is for his kids and grandkids. The younger worker says, and I paraphrase, "I don't know why everyone is so averse to taking care of themselves" or some such bushit.

I thought to myself, "You haven't seen the REAL stock market in your adult life - you missed all the fun (not) stuff of ups/downs, highs/lows, outrages and more outrages. Be afraid, be very afraid."

Of course I was talking to myself, who just happens to remember inflation under Carter, record deficits under Reagan, and an anemic/crashing stock market under Bush the Elder (just about the time this youngster in Santorum's town hall was getting ready to leave her diapers).

This is what we are up against.

[firefox]

5. Because taxes and laws changed

The tax cuts made dividends taxable at like 15% which was a big part of making them more attractive. Then companies benefited from a soft labor market because of outsourcing and high unemployment. They could cut the cost insurance if not eliminate the costs. The change in overtime laws changed the outlook of all future profits. People work more for less and if they bitch too much, the personnel director starts waving dozens of resumes of applicants looking for their jobs. And the new tort reform law and low interest rates did not hurt either.

Edit to add that there was a one time law that let the corporations repatriate foreign profits sold on the premise that the money would stimulate investment. This has been a very quiet happening and I only heard of it twice with the amount of $1.8 trillion mentioned only once.

[karlrschneider]

8. Ah, well thank you firefox! (my browser too!) :D and welcome to DU

I was behind the curve on the dividend tax thing. Again, welcome!
:toast: :D

[davekriss]

16. Could the dollar decline be contributing too?

THe dollar has lost 30% to 40% of its value since Bush took office (in 2001). To foreign investors, an 11,000 DOW today is a heck of a lot cheaper than an 11,000 DOW in 1999. Has there been an unusual inflow of foreign capital buying "on the cheap" and thus bolstering the DOW? Anyone know?

[Newsjock]

7. Because it's now a contrary indicator

Wealth has become so concentrated that a rising stock market now indicates, for most Americans, poorer financial times.

[autorank]

9. Very original. I agree. Any practitioners of the dismal science agree?

[karlrschneider]

12. Okay, that makes sense...thanks.

K

[NV Whino]

10. More outsourcing

= fewer U.S. jobs but better bottom line for companies. And that is what you are seeing on the stock market. Lower operating costs (outsourcing) means more profit for stockholders.

[jsquared]

11. Profits are at record levels and labor costs are the lowest % in 50 years.

This has been made possible by two trends: corporate outsourcing and overall cost-cutting and a huge increase in debt by consumers, even though their wages, and employment in general, are shrinking. Now that interest rates are creeping up, there will be a "tipping point" when consumer/mortgage debt becomes unmanageable and people just stop buying. Also, 40% of Fortune500 profits these days come from their finance activities (vs. provision of real goods and services), so everything will come tumbling down at the same time.

[karlrschneider]

14. Yeah, making money by "juggling" money, I get your point.

But what is the "tumbling down"? Depression? Collapse of our currency? Other nations calling in their chips? Or something like (remember?) "stagflation"? Nobody seems to have a plan to avoid or fix whatever the upshot of all this craziness will be.......:eyes:

[deacon]

15. It's allllll debt driven, the spending is from borrowed money n/t

[Dcitizen]

18. Self erased

[ldf]

19. it's just another cycle, but only after a few years...

rather than ten or twenty.

you know, the cycle where the "big money" creats a sustained rise in stock prices (although absolutely NOTHING warrants it, other than manipulated stories or outright lies), knowing that is required to entice the "small investors" back who were scared off by the bursting dot com bubble and the enron/worldcom/global crossing/arthur andersen ripoffs, in order to convince the mom and pop investors, who reluctantly DO come back, which then means the "big money" will manipulate a "correction" on the stock prices, otherwise known as a "selloff" or "profit taking", which then reduces the stock prices, which then causes a panic of selling by the "little investors", who can not afford to be in for the long haul, and never should have jumped in to start with, so the "big money" can come in and "bottom feed", buying cheapened stocks from the "gutless losers", who lose their shirts, while the "big money" gains even larger percentages of ownership, concentrating control in even fewer hands.

(oh my god i'm channeling will pitt!) :wow: MAKE IT STOP!!!

that is all the stock market is, a shell game where many have to lose for a few others to win.

you know, like vegas.

and this is what bush wants to do to social security, as payback to all his big wall street backers.

:puke:

[Yupster]

20. Most companies have now reported their

quarterly profits, and the news was mostly good.

I worry about gas prices though.

[DU_ONE]

22. Stock Market Rallies: Shades of the 1987 Crash.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=132&topic_id=1638996

[lovuian]

21. Record Company Profits, Inflation and where ya going to

put your money in a moneyMarket earning 1.3%

thats why!!!

Plus good PR for SS accounts!!!